On The Return Routes Of Spin-off Listing Of WuXi Apptec

With the development of Internet economy,many high-growth enterprises have sprung up.However,China's A-share market entry threshold is high,the approval time is also very long,so most of these companies choose to list in the U.S.in order to raise funds for development.These Chinese enterprises listed in the United States are referred as China concept stocks.Since the first Chinese company landed in the U.S.in 1992,the China concept stocks have experienced being sought after and being distrusted.Over the past 20 years,China's economy develop rapidly,the regulatory mechanism is maturing,and the market is more active,but the performance of the China concept stocks is not satisfactory because of the impact of the crisis of confidence.Therefore,some China concept stocks choose to return to the domestic capital market after weighing pros and cons.In order to understand the phenomenon of the return of China concept stock,this paper analyzes the routes of returned Chinese concept stocks,and probes into the applicable methods in different stages of the return process.In this paper,I select the first China concept stock enterprise that successfully returns to China by means of spin-off listing as the research object.I focus on analysis its return routes.In order to provide reference for China concept stocks who want to return to China's stock market in the future,I also set up a framework to analyze return routes.This paper use case study as research method.First,I introduce the whole return process of the Wu Xi App Tec,then I briefly analyze the return reasons.From the analysis,I know that the return reasons of Wu Xi App Tec include the underestimation of enterprise value,the disapproval of enterprise strategy,favorable innovation environment in China,and the maintenance costs reducing.After that,I make a detailed research on the return route of Wu Xi App Tec.This paper first analyzes the motivation of choosing to spin-off listing and the choice of spinning off.This paper believes that the motivation for the spin-off listing of Wu Xi App Tec is mainly due to the following four reasons: financing demand,management incentive demand,business concentration demand and value release demand.In addition,Combined with traditional return path,I analyze the return route of Wu Xi App Tec from three aspects which including advantages,risks and effectiveness.According to the study results,I found that compared with the traditional return route,the time of return route of Wu Xi App Tec is shorter,the procedure is simpler,the financing channel is more,and the market value of the enterprise can be higher.At the same time,through the research,I finds that there are some risks in the return route.Because the path does not dismantle the VIE structure,there are some problems might harm the company such as investment and technology transfer risk,exchange rate risk and so on.Beyond that,spin-off business may dilute shareholders' interests and increase the company's management costs.By comparing the data before-after spin-off listings,I find that the valuation and financial performance of enterprises have been significantly improved,the financing capacity of the spin-off company have been improved,and the development strategy has been implemented.Based on the research results,I put forward some suggestions for China concept stocks,the supervision department and the investors.For Chinese concept stocks,I hold that the enterprises should choose appropriate partners to ensure sufficient funds for privatization.In addition,in order to prevent risks and minimize the dilution of investors' interests,Chinese concept stock enterprises can improve their internal control system from the supervision mechanism,evaluation system and other aspects.At the same time,when considering whether to choose the spin-off listing,enterprises should first confirm their own needs.Spinoff listing is not an east way that can enhance the value of enterprises,correct their own spinoff motivation is the premise of successful spin-off.For regulators,this paper holds that appropriate relaxation of the entry standards for Chinese concept enterprises or the establishment of a new plate for these high-growth enterprises would be great,so that more high-quality enterprises can listed in China.In addition,regulators should step up regulation and enforcement to protect small and medium-sized shareholders who may have compromised their interests during the return process.For small and medium-sized investors,this paper holds that due to the problem of information asymmetry and lax supervision,small and medium-sized investors should think rationally and invest cautiously.